For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for October 4
Trading is very intense these days as there are a lot of news. Firstly the euro rose on reports that Italy plans to reduce its budget deficit over the next three years. Then a member of the US central bank said that he was comfortable with a December rate hike. This lifted the USD against other major currencies.
On Thursday, October 4, we will likely continue hearing news about Italy. The economic calendar is light with only Australian trade balance and Canadian Ivey PMI.
EUR/USD remains under negative pressure. Sellers will get new opportunities below 1.15. If the euro attempts to recover, it will meet resistance at 1.1590 and 1.1620.
British Prime Minister Theresa May said that the UK is "not afraid to leave the EU with no deal if it has to". Resistance for GBP/USD is at 1.3050 and 1.3080.
AUD and NZD suffer versus the USD and may try to revisit lows.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.